How much of your customer base — and your recurring revenue — disappears every month? Calculate customer (logo) churn, gross revenue churn, net revenue retention (NRR) and average customer lifetime, then project how churn compounds against growth over 12, 24 and 36 months.
Tip: Churn Rate Mode treats the period you enter as one month, so it also reports the annualized churn rate and the implied average customer lifetime.
Situation: A SaaS company starts the month with 1,000 customers and $50,000 of MRR. During the month it loses 30 customers (worth $3,000 of MRR), its remaining customers expand by $6,000, and 10 accounts downgrade for $1,000 of contraction.
Logo churn: 30 ÷ 1,000 × 100 = 3.0% for the month. Annualized: (1 − 0.97¹²) × 100 = 30.6%.
Gross revenue churn: $3,000 ÷ $50,000 × 100 = 6.0%. NRR: ($50,000 + $6,000 − $1,000 − $3,000) ÷ $50,000 × 100 = 104.0%.
Customer lifetime: 100 ÷ 3.0 = 33.3 months (about 2.8 years).
Situation: A mid-market subscription business loses 2% of its customers each month. Multiplying by 12 (24%) understates the real damage.
Correct annualization: (1 − (1 − 0.02)¹²) × 100 = (1 − 0.7847) × 100 = 21.5% a year, not 24% — but the compounding still means roughly one in five customers is gone after 12 months.
Customer lifetime: 100 ÷ 2 = 50 months ≈ 4.2 years. At 3% monthly churn the same business would average only 33.3 months.
Situation: A business has $50,000 MRR, grows new revenue at 5% per month, but churns 3% of revenue each month. Net monthly growth is only 5% − 3% = 2%.
36-month projection at 2% net: $50,000 × (1.02)³⁶ = $102,000. With zero churn and the same 5% growth it would be $50,000 × (1.05)³⁶ = $289,000.
Churn drag: the business gives up roughly $187,000 of monthly recurring revenue over three years — a gap that widens every month.
Churn Rate = the percentage of your base lost in one month (3% = 0.03 in the LTV formula)
ARPU = average revenue per user or per account, per month
Gross Margin % = the share of revenue left after delivering the service
Expansion MRR = upgrades, seat adds and cross-sells from existing customers
Contraction MRR = downgrades and partial cancellations from existing customers
| Segment | Typical Annual Churn | Typical Annual Revenue Churn | Why It Differs |
|---|---|---|---|
| Enterprise | 5%–7% | 3%–5% | Long contracts, deep integrations, dedicated success teams |
| Mid-Market | 10%–15% | 8%–12% | Annual commitments but lighter switching costs |
| SMB | 20%–30% | 15%–25% | Monthly plans, short sales cycles, frequent business failure |
| Consumer / B2C | 30%–50% | 25%–45% | Self-serve signup, discretionary spend, low commitment |
| Rule of thumb | 1%–2%/mo is healthy SaaS | Track alongside logo churn | Benchmarks move with macro conditions — compare against your own cohort history first |
Benchmarks are directional industry ranges compiled from recurring SaaS and subscription reports. Your segment, contract length and pricing model shift the numbers materially.
The first 90 days carry the highest churn risk. A guided setup, a clear activation milestone and a success call in week one typically cut first-year churn more than any pricing change.
Moving from monthly to annual billing converts a 3% monthly churn into a single annual renewal decision — and many enterprise benchmarks of 5–7% annual churn exist precisely because contracts are multi-year.
Expansion MRR offsets churn in the NRR calculation. A business with 6% gross revenue churn and 8% expansion earns a 104% NRR, which is far more valuable than simply chasing new logos.
Enter your starting customer count and the number lost to get a monthly churn rate, an annualized figure and the implied average customer lifetime.
Break revenue into churned, expansion and contraction MRR to see gross revenue churn and net revenue retention side by side.
Project MRR forward at your net growth rate and quantify exactly how much recurring revenue churn costs you over three years.
Compare your numbers against real annual churn ranges by segment — enterprise 5–7%, mid-market 10–15%, SMB 20–30% and consumer 30–50%.
Churn rate is the percentage of customers — or of recurring revenue — that a business loses during a given period. For subscription and SaaS companies it is the most important retention signal, because churn compounds exactly like interest: a seemingly harmless 3% monthly churn removes roughly 31% of your customer base in a year. Two flavours of churn matter, and they rarely move together. Customer churn (logo churn) counts accounts and shows how well you keep people. Revenue churn measures the MRR you lose and also captures downsells, so a business can improve logo churn while revenue churn worsens because its largest accounts downgrade.
Around 5–7% annual churn. Long contracts, deep integrations and dedicated success teams make customers expensive to lose — so retention is managed as a discipline.
Roughly 10–15% annual churn. Annual commitments blunt monthly volatility, but lighter switching costs than enterprise mean renewal conversations genuinely matter every year.
Around 20–30% annual churn. Monthly plans, short sales cycles and a base of young businesses combine to produce a base that turns over quickly and rewards aggressive onboarding.
About 30–50% annual churn. Self-serve signup, discretionary spend and almost no switching cost mean retention has to be earned every single billing cycle.
The most common churn mistake is multiplying a monthly rate by twelve. At 3% a month, 3 × 12 = 36%, but the true annual churn is 30.6% — because each month's losses are taken from an already-shrunken base. The correct conversion is (1 − (1 − monthly churn)¹²) × 100, which is simply the monthly rate compounded twelve times. Getting this right matters when you compare yourself to published benchmarks, most of which are quoted annually.
Because compounding works in your favour too, small improvements pay off disproportionately. Cutting monthly churn from 3% to 2% lifts average customer lifetime from 33 months to 50 months and lowers annual churn from 30.6% to 21.5% — without changing a single price or acquisition channel.
Net revenue retention (NRR) answers a sharper question than churn alone: if you stopped selling to new customers today, how much recurring revenue would you still have a year from now? It adds expansion MRR, subtracts contraction and churned MRR, and divides by the starting base. A company with 104% NRR can grow from its existing customers alone. Because NRR folds churn, downgrades and upsells into one number, it is the metric investors scrutinise most closely.
| Net Revenue Retention | What It Signals |
|---|---|
| Above 110% | Best-in-class. Expansion more than covers all churn and contraction — the existing base grows on its own. |
| 100%–110% | Good. Expansion offsets losses, so the base is broadly flat to gently growing. |
| 90%–100% | Acceptable but leaky. Growth depends entirely on new customer acquisition. |
| Below 90% | A warning sign. The existing customer base is shrinking faster than you can upsell it. |
Take a $50,000-MRR business with 1,000 customers: ARPU = $50 per month. At an 80% gross margin and 3% monthly churn, LTV = $50 × 0.80 ÷ 0.03 = $1,333.
The LTV:CAC ratio of at least 3:1 is the standard rule of thumb — a healthy business spends no more than a third of a customer's lifetime value to acquire them. If CAC is $400, the ratio above is 3.3:1. Raise churn to 6% and LTV halves to $667, dropping the ratio to 1.7:1 — too thin to fund growth.
⚠️ Disclaimer: This churn rate calculator is provided for educational and estimation purposes only. The benchmarks shown (enterprise ≈5–7%, mid-market ≈10–15%, SMB ≈20–30%, consumer ≈30–50% annual churn; NRR above 110% best-in-class; LTV:CAC of at least 3:1) are directional industry rules of thumb, not guarantees, and vary with contract length, pricing model and market conditions. Results depend entirely on the figures you enter and assume a consistent measurement period. Figures are estimates, not financial or investment advice.